£22k RBS loan for a 78 yr old?

DavidMCR

My mum, 81, is still paying a £22k debt to RBS since 2012. They ( by phone) suggested she consolidate several credit cards and a loan for £13,500 and agreed with interest totalling the debut to £22k to take her disability money to pay the debt £269. This can't be right? She's been unable to work since she was 55 and living on peanuts ever since.

It's only since I started reading MSE that I wondered how the hell this could be allowed to happen. She's with CAP now and has paid £18k off! My question is - how could any responsible lender agree to take somebody's entire disability money to cover a loan? Is that really ethical? Something can surely be done and if anyone can offer any advice of where I should take this next it would be great appreciated.

tomtontom

Did your mum lack capacity at the time she took out the loan? Was the loan a better deal than the credit cards she was already paying off (loans generally have lower interest rates than long term CC borrowing)?

DavidMCR

Hi, as in mental capacity? No, but she was just about coping with her debts. I need to check how the debt became so huge - it looks they added the loan term interest (around £9k) to the overall debt which may well be legal, but taking a disability payment as a steady income is morally questionable. The interest is pretty sizeable so I don't see how this was a consolidation loan was an advantage considering she would be 83 when it ended. She has no savings and was trying to get by as best she could. I'm not chasing a pay out etc, just been going through her papers to help with one or two matters and came across this.

DavidMCR

Does anyone know if there's ever been a precedent to a loan like this - is taking a disability pension really ethical? My mum didn't apply for the loan, the bank called and offered it.